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Weekly Business News from Myanmar
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Government plans to take USD $ 60 million loans from the Asian Development Bank (ADB) to establish a Credit Guarantee Corporation (CGC) in Myanmar’s SMEs sector
Myanmar is planning to take a US$60 million loan from the Asian Development Bank (ADB) to establish a Credit Guarantee Corporation (CGC), U Maung Maung Win, the Deputy Minister for the Ministry of Planning, Finance, and Industry, said in Parliament on May 21. The proposal was sent by the President. U Maung Maung Win said small and medium enterprises (SMEs) in Myanmar lack a credit guarantee system which limits the amount of unsecured loans the banks are able to extend to an SME. In Myanmar, 98pc of the economy comprises SMEs, while 95pc of the workforce is employed by this sector, according to government data. Yet, bank lending for business in Myanmar comprises just 37 percent of GDP, which is low compared to other countries in the region. “Establishing the CGC will help solve the problem of SMEs having insufficient collateral and documentation, which prevents them from getting a loan from the banks,” he said. -
The investors urged government to extend the deadline of a tender to get more time to prepare bids
The Ministry of Electricity and Energy has issued a tender for 1,060 megawatts of on-grid solar power but given investors just a month to prepare bids at a time when they are unable to enter or travel around the country. Investors and analysts have urged the government to extend the deadline of a tender for up to 1,060 megawatts of solar power, arguing that bidders have not been given enough time to prepare proposals and the government is unlikely to get the best possible price. The Ministry of Electricity and Energy’s Electric Power Generation Enterprise announced the tender on May 18, setting a closing date of June 18 for bids. The tender covers 30 sites and invites proposals for projects ranging from 30 to 50MW. The winning bidders will be granted 20-year concessions. The tender had been eagerly anticipated and was expected to attract strong interest from foreign investors. But the decision to call it during the COVID-19 outbreak and with a short window to prepare proposals has been greeted with dismay and anger, souring what should have been a milestone for the power sector and a major success story for a government keen to attract foreign investment. -
The role of Public – Private Partnership (PPP) is very important to fight against COVID – 19 pandemic
The World Health Organization (WHO) announced COVID-19 can be characterized as pandemic on 11th March, 2020. We have already been through the impact of this pandemic before the outbreak hit our own lands. When it does happen, the government is the first to respond in any country. As the virus is new, we still have a lot yet to learn over time. This is a long term battle for the human being and the sector of PPP plays a key role to fight against COVID-19. As the State Counsellor, Daw Aung San Suu Kyi said, “People are the Key”. We would like to mention that we all need to know the 5As to fight against COVID-19: Asymptomatic Carrier, Avoid Crowded Places, Activate Immunity, Active Community Participation and Attitude towards using Masks, Handgel, Handwashing and Physical Distancing. To implement 5As, the role of PPP is very important. One way to prevent this catastrophe is to reduce the number of new cases per day by preventing people from being exposed to infected individuals through physical distancing, thereby reducing the probability of new infections. Moreover, taking private healthcare providers into confidence, training them where necessary and planning a cost-cutting strategy to relay the benefit to the people may lighten the burden on public healthcare system in such scenarios. Such a symbiotic association will benefit the general public greatly in the face of a healthcare emergency. -
Yangon Stock Exchange (YSX) and six securities firms asked to beef up anti-money laundering compliance and disclosure
The Yangon Stock Exchange (YSX) and six securities companies were requested by the regulator to beef up their compliance and disclosure in line with its anti-money laundering regulations. The Securities and Exchange Commission (SECM), in a May 18 announcement, identified “insufficient information collection and reporting procedures” for both the bourse and the firms in following the 2016 anti-money laundering and counter-terrorism financing instruction, after a recent official inspection. The regulator conducted the first inspection on the bourse and the third inspection on six securities companies between August 2019 and January 2020. The YSX also needs to strengthen its internal control system, such as setting up an audit committee, and expand the number of staff, according to the announcement. -
Government will borrow K 1.3 trillion from the Central Bank of Myanmar (CBM) to plug the budget deficit for fiscal 2019 – 2020
The government will borrow K1.3 trillion from the Central Bank of Myanmar (CBM) to plug the budget deficit for fiscal 2019-20, deputy minister for Planning and Finance U Maung Maung Win told Pyidaungsu Hluttaw on May 21. This is expected to be around 20 percent of total borrowings to fund the deficit. It also indicates a further decline in CBM borrowing from 25pc over the past two fiscal years and over 50pc in 2016-17. Prior to that, the CBM funded the bulk of the country's deficits. The lower levels of CBM borrowing is in line with the country's plan to reduce its reliance on central bank financing and more on bond financing. Under the Budget Law for the fiscal year, the actual amount that the government can raise through borrowings, including bonds, shall not be more than K9 trillion. -
Insurers see surge in Myanmar market interest driven by COVID – 19 pandemic
While COVID-19 has increased awareness on the importance of health insurance and led to better sales of life and health policies, demand for other insurance products has taken a beating, industry leaders say. For KBZ MS General Insurance, monthly sales of individual health products have gone up five times compared to pre-pandemic figures. “This is partly driven by our extra 50 percent-free COVID-19 benefits campaign, but in general people are more receptive to the concept of protection when they’re faced with an immediate crisis,” said Anil Mancham, CEO of KBZ MS. The firm is a partnership between Yangon-based IKBZ Insurance and Japan’s Mitsui Sumitomo Insurance. -
E – Commerce Virtual Conference will be held on 28 May to relieve economic situation in Myanmar due to the impact of COVID – 19
To relieve economic situation in Myanmar due to impact of COVID-19, to have better economic development and to introduce more new rice products, E-commerce Virtual Conference will be held on 28 May, according to the statement issued by the Ministry of Commerce. During the conference, COVID-19 Economic Relief Plan (CERP) and collaboration plan between public and government will be discussed, according to the statement. -
Dai – ichi Life insurance providers in Myanmar taking long – term view of challenges to industry
Life insurance providers in Myanmar are upping their game, spurred by the gradual rise of COVID-19 cases in the country. “At the moment, people are more aware of their personal health and are asking if their health and life insurance policies cover COVID-19,” said U Thaung Han, secretary of the Myanmar Insurance Association. In response, a growing number of providers have started offering insurance policies against the virus to retain customers and draw new ones. “It is not a government order. The local and foreign insurers are just responding to the needs and demands of their customers,” he said. While a setback for Myanmar’s insurance providers in the short term, the coronavirus pandemic presents an opportunity to raise interest and expand market share in the long term. -
Member of Parliament warned Australian – backed mining in Myanmar’s far North may spark protest
A Kachin lawmaker voiced concerns in the Upper House of Parliament about an Australian-backed company’s plan to conduct a feasibility study for a large-scale mining exploration project in an area of Myanmar’s northernmost township with snow-capped mountains and a largely untouched environment. The Australian-backed Fortuna Metals Co. Ltd submitted a proposal to the government in August 2018 to carry out a feasibility study for a project to extract gold, metals and other minerals on nearly 300,000 acres—an area almost twice the size of Singapore—in Khaunglanhpu Township in northern Kachin State’s Putao District, where Myanmar’s largest area of forest cover is located. Last November, the Kachin State government gave the company a green light to carry out the study. According to the Directorate of Investment and Company Administration (DICA), two directors of the company are Australian citizens and one is a Myanmar citizen. -
Myanmar Livestock sector decline may pose longer term food security issues as the result of COVID – 19
The Myanmar livestock sector is among the sectors impacted as a result of COVID-19, according to results of a Myanmar Livestock Federation survey released May 18. The survey involved more than 300 livestock businesses across Myanmar. Based on the feedback, the three main challenges faced by the sector are declining livestock prices, a surplus of cattle and transportation limits. These challenges are interconnected. Prices have declined due to a lack of market demand as a result of COVID-19, causing a surplus of animals. Meanwhile, disruptions to transport have slowed trade, leading to declines in price. 97 percent of survey respondents said their businesses are either facing profit declines or have sunk into losses.
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